-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NKTZIxErD8Q98oHfKT9CPYLmSJdsA0OLnUznUsghRlY+1zoWNYDUkcRzbDGmffjX bgydnIwZHz8mdzFr2SN/+Q== 0000909518-01-500220.txt : 20010810 0000909518-01-500220.hdr.sgml : 20010810 ACCESSION NUMBER: 0000909518-01-500220 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20010809 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PIRELLI S P A CENTRAL INDEX KEY: 0001156964 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: VIALE SARCA 222 20126 CITY: MILAR ITALY STATE: L6 ZIP: 00000 MAIL ADDRESS: STREET 1: VIALE SARCA 222 20126 CITY: MILAR ITALY STATE: L6 ZIP: 00000 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TELECOM ITALIA S P A CENTRAL INDEX KEY: 0000948642 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-61827 FILM NUMBER: 1702389 BUSINESS ADDRESS: STREET 1: CORSO D ITALIA 41 CITY: ROME 00198 STATE: L6 BUSINESS PHONE: 2123088799 MAIL ADDRESS: STREET 1: 400 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: STET SOCIETA FINANZIARIA TELEFONICA PA DATE OF NAME CHANGE: 19950727 SC 13D 1 tis-13d.txt ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D ------------ (Rule 13d-101) ------------------------------ TELECOM ITALIA S.P.A. (Name of Issuer) ORDINARY SHARES OF EURO 0.55 PAR VALUE EACH 87927W10 (Title of class of securities) (CUSIP number) ALEXANDER ROSENZWEIG, ESQ. VICE PRESIDENT AND CHIEF LEGAL OFFICER PIRELLI NORTH AMERICA, INC. 246 STONERIDGE DRIVE SUITE 400 COLUMBIA, SOUTH CAROLINA 29210 (803) 951-1040 WITH A COPY TO: ELLEN J. ODONER, ESQ. WEIL, GOTSHAL & MANGES LLP 767 FIFTH AVENUE NEW YORK, NEW YORK 10153 (212) 310-8000 (Name, address and telephone number of person authorized to receive notices and communications) JULY 30, 2001 (Date of event which requires filing of this statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent. (Continued on following pages) (Page 1 of 16 Pages) NY2:\1069062\14\MWW614!.DOC\67793.0060
- ------------------------------------------------------------ ------------------------------------------------------- CUSIP No. 87927W10 13D Page 2 of 16 - ------------------------------------------------------------ ------------------------------------------------------- - ------------ -------------------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON PIRELLI S.p.A. I.R.S. IDENTIFICATION NO. Not Applicable OF ABOVE PERSON - ------------ -------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [X] (b) [ ] - ------------ -------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------ -------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS: BK, WC - ------------ -------------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [ ] - ------------ -------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION: Italy - ------------ -------------------------------------------------------------------------------------------------------------------- 7 SOLE VOTING POWER: 0 NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH ---------------------- ------------------------------------------------- --------------------------------------- 8 SHARED VOTING POWER: 2,890,353,432 (See Item 5) ---------------------- ------------------------------------------------- --------------------------------------- 9 SOLE DISPOSITIVE POWER: 0 ---------------------- ------------------------------------------------- --------------------------------------- 10 SHARED DISPOSITIVE POWER: 2,890,353,432 (See Item 5) - ------------ -------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 2,890,353,432 (See Item 5) - ------------ -------------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [ ] - ------------ -------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 54.94% (See Item 5) - ------------ -------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON: CO - ------------ --------------------------------------------------------------------------------------------------------------------
2 ITEM 1. SECURITY AND ISSUER This Statement on Schedule 13D relates to the ordinary shares, euro 0.55 par value per share ("Telecom Italia Shares"), of Telecom Italia S.p.A., a company incorporated under the laws of the Republic of Italy ("Telecom Italia"). According to Telecom Italia's Annual Report on Form 20-F for the fiscal year ended December 31, 2000 (the "Telecom Italia 20-F"), the principal executive offices of Telecom Italia are located at Corso d'Italia 41, 00198 Rome, Italy. ITEM 2. IDENTITY AND BACKGROUND This Statement is filed by Pirelli S.p.A., a company incorporated under the laws of the Republic of Italy ("Pirelli"). As discussed in Items 3, 4, 5 and 6 below, Pirelli and Edizione Holding S.p.A. ("Edizione Holding") are members of a group with respect to Telecom Italia Shares. Pirelli is making an individual filing on Schedule 13D in accordance with Rule 13d-1(k)(2) under the Securities Exchange Act of 1934 and is responsible solely for the information contained in its individual filing. Pirelli, through its subsidiaries and affiliates, is principally engaged in the manufacture and distribution of tires and of cables and systems for the telecommunication and energy sectors. Its principal executive offices are located at Viale Sarca 222, 20126 Milan, Italy. Approximately 27.53% of Pirelli's share capital (approximately 30.01% disregarding Pirelli's ownership of approximately 8.51% of its share capital) is held by Pirelli & C. Lux. S.A., a company incorporated in Luxembourg ("Pirelli-Lux"). The principal business of Pirelli-Lux is to hold Pirelli shares. Its principal executive offices are located at 13, Bd. Du Prince Henry, 1724 Luxembourg. All of the share capital of Pirelli-Lux is owned by Pirelli & C. A.p.A., a publicly traded limited partnership organized under the laws of the Republic of Italy ("Pirelli & C"). The principal business of Pirelli & C. is to hold Pirelli shares and real estate and other investments. Its principal executive offices are located at Via G. Negri 10, Milan, Italy. Pirelli & C. directly owns approximately 8.96% of Pirelli's share capital (approximately 9.79% disregarding Pirelli's ownership of approximately 8.51% of its share capital). Pirelli & C.'s direct and indirect ownership of Pirelli's share capital totals 36.49% (approximately 39.8% disregarding Pirelli's ownership of approximately 8.51% of its share capital). As reported by the Commissione Nazionale delle Societa e della Borsa (the Italian securities regulatory authority known as "Consob"), the following shareholders of Pirelli & C. held more than 2% of the total number of outstanding ordinary shares of Pirelli & C. ("P & C Shares") as of August 3, 2001: Camfin S.p.A. (25.148%), Assicurazioni Generali S.p.A. (6.029%), Edizione Holding (6.027%), Holding di Partecipazione Industriali S.p.A (6.006%), S.A.I. S.p.A. (5.702%), R.A.S. S.p.A. (5.252%), Mediobanca S.p.A. (4.999%) and Sanpaolo Imi Asset Management SGR S.p.A. (2.218%). Camfin S.p.A. is indirectly controlled 3 by Dr. Marco Tronchetti Provera, the Chairman of Pirelli and of Pirelli & C. Camfin S.p.A. directly owns 1.539% of Pirelli's share capital (1.68% disregarding Pirelli's ownership of approximately 8.51% of its share capital). Pursuant to an agreement dated March 24, 1998 and amended March 23, 2001 among BZ Group Holding Limited, Pirelli & C. and Dr. Tronchetti, Dr. Tronchetti has the right to direct the voting of 2.5% of Pirelli's share capital held by BZ Group Holding Limited until March 13, 2003 (2.73% disregarding Pirelli's ownership of approximately 8.51% of its share capital). Certain shareholders of Pirelli & C. are parties to an agreement (the "P & C Agreement") which states that it is intended to ensure the stability of the share ownership of Pirelli & C. Not all of the P & C Shares held by each of the parties are subject to the provisions of the P & C Agreement and, as at July 30, 2001, the total number of P & C Shares that were subject to the P & C Agreement represented 56.26% of the total number of P & C Shares outstanding. As discussed below, the P & C Agreement does not restrict the parties from voting any of their P & C Shares as they see fit. However, it prohibits them from transferring those P & C Shares held by them that are subject to the P & C Agreement to any person other than an affiliate or another party to the P & C Agreement. The P & C Agreement also provides for the establishment of a Board of Directors of the P&C Agreement comprised of representatives of the parties to the P & C Agreement and two members of the management of Pirelli & C. It is intended that the Board of Directors of the P&C Agreement meet at least twice a year with the Board of Directors of Pirelli & C. to consider Pirelli & C.'s progress during the preceding six months and other significant matters. In the event that any decision of the Board of Directors of the P&C Agreement with respect to a proposal to be placed before the shareholders of Pirelli & C. is not unanimous, each of the parties to the P & C Agreement may freely exercise its right to vote any of its P & C Shares with respect thereto. The P & C Agreement extends until April 15, 2004 and may be renewed for successive three-year terms unless the total number of P & C Shares subject to the agreement is less than 33%. The parties to the P & C Agreement and the percentage of the total number of P & C Shares outstanding as of July 30, 2001 that are represented by those of their P & C Shares that are subject to the provisions of the P & C Agreement are as follows: Camfin S.p.A. (21.04%), Holding di Partec. Industr. S.p.A. (5.66%), S.A.I. S.p.A. (5.38%), Edizione Holding (5.09%), R.A.S. S.p.A. (5.09%), Assicurazioni Generali S.p.A. (4.89%), Mediobanca S.p.A. (4.77%), G.I.M. S.p.A. (2.00%), Massimo Moratti (1.31%) and Sinpar International S.p.A. (1.03%). The name, business address, citizenship, present principal occupation or employment (and name, principal business and address of any corporation or organization at which such employment is conducted) of each director and executive officer of Pirelli, Pirelli-Lux and Pirelli & C. are set forth on Schedule I. During the past five years, neither Pirelli, nor to Pirelli's knowledge, Pirelli-Lux or Pirelli & C. has been (i) convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, 4 decree or final order enjoining future violations of, or prohibiting or mandating activity subject to, federal or state securities laws or finding any violation with respect to such laws. Information as to the directors and executive officers of Pirelli, Pirelli-Lux and Pirelli & C. will be filed by amendment. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION On July 30, 2001, Pirelli and Edizione Holding entered into an agreement (the "Purchase Agreement") with Bell S.A. ("Bell") pursuant to which they agreed to purchase from Bell, either directly or through a company to be jointly owned by them (the "Purchaser"), 1,552,662,120 ordinary shares ("Olivetti Shares") of Olivetti S.p.A. ("Olivetti") and 68,409,125 2001-2002 warrants of Olivetti ("Olivetti Warrants" and, together with the Olivetti Shares, the "Olivetti Securities"). A copy of the Purchase Agreement is filed as Exhibit 1. The purchase obligation under the Purchase Agreement is guaranteed as to 80% by Pirelli and as to 20% by Edizione Holding and is subject to European Union antitrust and other regulatory approvals. If the date upon which the Olivetti Securities are purchased pursuant to the Purchase Agreement (the "Closing Date") is August 31, 2001, then the aggregate purchase price for the Olivetti Securities will be approximately euro 6.56 billion (comprised of euro 4.175 per Olivetti Share and euro 1.0875 per Olivetti Warrant). If the Closing Date is prior to or following August 31, 2001, then the purchase price will be correspondingly decreased or increased according to a formula set forth in the Purchase Agreement. The Purchase Agreement also provides that in the event Banca Di Roma seeks to sell 54,000,000 Olivetti Shares (the "Additional Olivetti Shares") at the same price per Olivetti Share as the Purchaser shall have paid on the Closing Date, Bell will purchase or cause to purchase the Additional Olivetti Shares and give notice of the purchase to the Purchaser within 90 days following the Closing Date. The Purchaser will then have the right to purchase the Additional Olivetti Shares from Bell within 180 days after receipt of notice of the purchase and, if the Purchaser does not elect to purchase such shares, Bell will have the right to require the Purchaser to purchase the Additional Olivetti Shares within 30 days thereafter, in each case at the same price per Olivetti Share as the Purchaser shall have paid on the Closing Date. Assuming that the closing under the Purchase Agreement occurs on August 31, 2001, the aggregate purchase price for the Additional Olivetti Shares will be approximately euro 225.5 million. On August 3, 2001, the Purchaser was organized under the laws of the Republic of Italy for the purpose of acquiring the Olivetti Securities. A copy of an agreement, dated August 7, 2001, between Pirelli and Edizione Holding relating to the organization and governance of the Purchaser (the "Shareholders Agreement") is filed as Exhibit 2. Pursuant to the Shareholders Agreement, the Purchaser will be capitalized with at least euro 5.2 billion, 80% of which will be contributed by Pirelli in cash (in exchange for 80% of the total share capital of the Purchaser) and 20% of which will contributed by Edizione Holding in cash (in exchange for 20% of the total share capital of the Purchaser). It is anticipated that the balance of the funds required to meet the purchase obligations under the Purchase Agreement will be borrowed from financial institutions. It is anticipated that Pirelli's equity investment in the 5 Purchaser will be funded from a combination of available cash on hand and borrowings under existing and new credit facilities. Pursuant to the Shareholders Agreement, each of Pirelli and Edizione Holding has agreed to transfer to the Purchaser, against payment at specified prices, 130,980,000 and 134,322,250 Olivetti Shares owned by them, respectively, as of July 30, 2001. Pirelli acquired these 130,980,000 Olivetti Shares for an aggregate of approximately euro 285 million which it obtained from available cash on hand. On July 30, 2001, concurrently with entering into the Purchase Agreement, Pirelli, acting also on behalf of Edizione Holding, acquired an aggregate of 147,337,880 Olivetti Shares from Bell and GPP International S.A. for euro 4.175 per Olivetti Share or an aggregate of approximately euro 615 million. Pirelli obtained the required funds from available cash on hand. Pursuant to the Shareholders Agreement, Pirelli has agreed to transfer these Olivetti Shares to the Purchaser against payment at a specified price. ITEM 4. PURPOSE OF TRANSACTION Pirelli's purpose in entering into the Purchase Agreement and directly acquiring certain additional Olivetti Shares is to refocus Pirelli's strategy on telecommunication services. Upon the closing under the Purchase Agreement, the Purchaser will acquire 1,552,662,120 Olivetti Shares and Olivetti Warrants exercisable for an aggregate of 34,204,563 Olivetti Shares through December 15, 2002 at a price of euro 2.00 per Olivetti Share. The total number of Olivetti Shares to be acquired by the Purchaser pursuant to the Purchase Agreement and to be transferred to the Purchaser by Pirelli and Edizione Holding will represent approximately 26.9% of the Olivetti Shares reported by Consob to be outstanding as of August 9, 2001 (27.7% if the Additional Olivetti Shares are purchased), assuming the Olivetti Warrants are not exercised. Pirelli will own 80% and Edizione Holding will own 20% of the Purchaser's share capital. For a discussion of the governance of the Purchaser by Pirelli and Edizione Holding under the Shareholders Agreement, see Item 6 below. According to Olivetti's Annual Report for the fiscal year ended December 31, 2000, Olivetti is a publicly traded industrial holding company organized under the laws of the Republic of Italy with its principal executive offices located at Via Jervis 77, Ivrea, Italy. The Olivetti Annual Report states that Olivetti is focused on telecommunications through its ownership of a majority of the outstanding Telecom Italia Shares. In the Purchase Agreement, Bell has agreed that, on the Closing Date, certain directors of Olivetti (other than Mr. Enrico Bondi) will resign and certain directors of Telecom Italia (other than Mr. Bondi) will resign. Mr. Bondi replaced Mr. Roberto Colaninno as Managing Director and General Manager of Olivetti and as Chairman and Managing Director of Telecom Italia on July 31, 2001. As soon as practicable after the Closing Date, the Purchaser will take the necessary action to convene a meeting of the shareholders of Olivetti at which 6 the Purchaser will seek to elect its nominees to fill all the vacancies created by the Olivetti director resignations. Under Italian company law and Olivetti's organizational documents, the affirmative vote of holders of a majority of the ordinary shares of Olivetti present at a shareholders meeting is required to elect Olivetti directors. Accordingly, there can be no assurance that the Olivetti Shares beneficially owned by the Purchaser (representing 26.9% of the total number reported to be outstanding as of August 9, 2001 and 27.7% if the Additional Olivetti Shares are purchased) will afford the Purchaser sufficient voting power to elect its nominees. If the Purchaser's nominees are elected to the Olivetti Board of Directors, it is anticipated that, as soon as practicable thereafter, Olivetti will take the necessary action to convene a meeting of the shareholders of Telecom Italia at which Olivetti will seek to elect its nominees to fill all vacancies created by the Telecom Italia director resignations. At that meeting, by virtue of its ownership of a majority of the Telecom Italia Shares (based upon the total number reported to be outstanding as of August 9, 2001), Olivetti will have sufficient voting power to elect its nominees to the Telecom Italia Board of Directors. Under Italian company law and Telecom Italia's organizational documents, Telecom Italia directors may be elected by a majority of the Telecom Italia Shares present at a shareholders meeting, subject to the right of the government of the Republic of Italy to appoint one Telecom Italia director. It is anticipated that, after the Closing Date, the following individuals will comprise the senior management of Olivetti and of Telecom Italia: Marco Tronchetti Provera, the Chairman of Pirelli, as Chairman; Gilberto Benetton, the Chairman of Edizione Holding, as Deputy Chairman; and each of Carlo Buora, the Managing Director of Pirelli, and Mr. Bondi as Managing Directors. Except as set forth above, neither Pirelli nor, to its knowledge, Pirelli-Lux or Pirelli & C. has any present plans or proposals which relate to or would result in any of the actions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. However, after the Closing Date, Pirelli intends to make a detailed review of the assets, liabilities, businesses and operations of Telecom Italia, its subsidiaries and affiliates, and Pirelli specifically reserves the right to adopt and pursue one or more such plans, and to make one or more such proposals, at any time and from time to time in the future. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) According to information reported by Consob, as of August 9, 2001, 5,261,328,631 Telecom Italia Shares were outstanding and 7,283,040,814 Olivetti Shares were outstanding. According to Amendment No. 5 to Olivetti's Statement on Schedule 13D, dated January 10, 2001, with respect to Telecom Italia Shares, Olivetti beneficially owns 2,890,353,432 Telecom Italia Shares, representing 54.94% of the total number reported to be outstanding as of August 9, 2001. Pursuant to the Purchase Agreement, Pirelli and Edizione Holding have agreed to acquire, through the Purchaser, Olivetti Shares representing 21.32% of the total number reported to be outstanding as of August 9, 2001. Pirelli and Edizione Holding also intend to transfer to the Purchaser Olivetti Shares presently owned by them representing 3.82% and 1.84%, respectively, of the total number reported 7 to be outstanding as of August 9, 2001. Accordingly, as discussed in Items 3 and 4 above, Pirelli and Edizione Holding may be deemed to beneficially own 26.9% of the Olivetti Shares reported to be outstanding as of August 9, 2001 (27.7% if the Additional Olivetti Shares are purchased) and, therefore, the Telecom Italia Shares beneficially owned by Olivetti. By virtue of their share ownership of Pirelli, each of Pirelli-Lux and Pirelli & C. may be deemed to beneficially own all Telecom Italia Shares beneficially owned by Pirelli. To Pirelli's knowledge, except as provided in this Item 5(a), neither Pirelli-Lux nor Pirelli & C. may be deemed to beneficially own any Olivetti Shares or Telecom Italia Shares. Information as to the beneficial ownership of Olivetti Shares or Telecom Italia Shares by directors and executive officers of Pirelli, Pirelli-Lux and Pirelli & C. will be filed by amendment. (b) On and from the Closing Date, assuming the election of the Purchaser's nominees to the Olivetti Board as discussed in Item 4 above and subject to the provisions of the Shareholders Agreement, Pirelli may be deemed to have (and, by virtue of their share ownership of Pirelli, each of Pirelli-Lux and Pirelli & C. may be deemed to have) shared power to vote or to direct the vote, and shared power to dispose or to direct the disposition of, all Telecom Italia Shares beneficially owned by Olivetti. Under such circumstances Pirelli may be deemed to share voting and dispositive powers with Olivetti, the Purchaser and, in accordance with the Shareholders Agreement, Edizione Holding. (c) Except as disclosed in Item 3 above, Pirelli has not, and to Pirelli's knowledge, neither Pirelli-Lux nor Pirelli & C. has, effected any transaction in the Telecom Italia Shares during the past 60 days. Information as to any such transactions by directors or executive officers of Pirelli, Pirelli-Lux and Pirelli & C. will be filed by amendment. (d) Not applicable. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER Except as disclosed in this Item 6, neither Pirelli, nor, to Pirelli's knowledge, Pirelli-Lux or Pirelli & C. is party to any contract, arrangement, understanding or relationship (legal or otherwise) with respect to the securities of Olivetti or Telecom Italia. Information as to directors and executive officers of Pirelli, Pirelli-Lux and Pirelli & C. will be filed by amendment. PURCHASE AGREEMENT The description of the Purchase Agreement contained in Items 3 and 4 above is incorporated herein by reference. 8 SHAREHOLDERS AGREEMENT Under the Shareholders Agreement, the Purchaser's Board of Directors will consist of ten members. Pirelli shall have the right to appoint eight of the members of the Purchaser's Board of Directors and Edizione Holding shall have the right to appoint two members. Actions by the Purchaser's Board of Directors may be taken by majority vote, except that any resolution of the Board of Directors relating to the following items will require the approval of at least one director appointed by Edizione Holding if present at the meeting: (i) determinations as to how the Purchaser will vote its Olivetti Shares; (ii) any purchase or sale by the Purchaser of shareholdings with a value exceeding euro 100,000,000; (iii) borrowings by the Purchaser from third parties; and (iv) proposals to be submitted to any extraordinary general meeting of the Purchaser's shareholders. Pirelli and Edizione Holding have agreed that, to the extent permitted by law, they will seek to cause one-fifth of any directorships (other than those reserved by law, by-laws or other regulations to the market or governmental authorities) on the Boards of Directors of Olivetti, Telecom Italia, Seat Pagne Gialle S.p.A ("SEAT"), Telecom Italia Mobile S.p.A. ("TIM") and certain other companies controlled by Olivetti, Telecom Italia, SEAT and TIM to be filled by nominees of Edizione Holding and the Vice Chairman of each of those companies to be designated by Edizione Holding. Edizione Holding has agreed not to oppose any nominations made by Pirelli to fill any remaining directorships on these Boards of Directors. Resolutions of the Boards of Directors of Olivetti, Telecom Italia, SEAT and TIM may be passed by majority vote, except that Pirelli has agreed that, to the extent permitted by law, it will seek to cause the following resolutions not to be passed without the approval of at least one director nominated by Edizione Holding if present at the meeting: (i) transactions with a value in excess of euro 250,000,000, (ii) proposals to convene an Extraordinary Shareholders Meeting and (iii) transactions involving affiliates of Pirelli with a value in excess of euro 50,000,000. In the event that Pirelli and Edizione Holding (or their respective nominees) reasonably foresee that a deadlock will occur in the proceedings of an Extraordinary Shareholders Meeting of the Purchaser, or with respect to the passing of a resolution of the Board of Directors of the Purchaser (with reference to those issues which require the approval of at least one director of Edizione Holding if present) or a resolution of the Board of Directors of Olivetti, Telecom Italia, TIM or SEAT, the parties will meet in an effort to attempt to resolve their disagreements. If this effort is unsuccessful, Edizione Holding will be required to abstain (or to cause its nominees to abstain) from voting in order to avoid the deadlock arising. In that event, Edizione Holding will have the option to require Pirelli to purchase all its shares in the Purchaser, and Pirelli will have the option to require Edizione Holding to sell such shares to Pirelli, at a price (the "Transfer Price") to be determined by two investment banks (each nominated by one of the parties) after taking into account certain factors set forth in the Shareholders Agreement. If the two investment banks nominated by the parties are unable to agree upon the price, it is to be determined by a third investment bank (to be selected by the other two 9 investment banks or, in the event that they are unable to agree, by the President of the Milan Tribunal). Pirelli has the right to require Edizione Holding to purchase all its shares in the Purchaser at a price equal to 300% of the Transfer Price if, for any reason, the majority of the members of the Board of Directors of Edizione Holding shall cease to be designated by certain members of the Benetton family. Edizione Holding has the right to require Pirelli to purchase all its shares in the Purchaser at a price equal to 300% of the Transfer Price if Dr. Marco Tronchetti Provera ceases to be responsible for the strategic and operational management of Pirelli and Pirelli & C. for any reason other than Dr. Tronchetti's voluntary resignation from such responsibilities. The parties have certain pre-emption and co-sale rights with respect to sales of shares in the Purchaser to third parties. These rights do not, however, apply to Pirelli's sale of up to 20% of the Purchaser's share capital to third parties (which sale is subject to Edizione Holding's approval, which cannot be unreasonably denied in the case of sales to financial investors). The parties are prohibited from acquiring shares in Olivetti (or certain other securities that are convertible into, or exercisable for, such shares). The Purchaser is also prohibited from acquiring such shares or other securities if doing so would result in the Purchaser's shareholding in any such company to exceed the 30% threshold which, under Italian law, would require the Purchaser to make a public offer for the securities of that company. If so requested by Pirelli, Edizione Holding shall not act to prevent the Purchaser from accepting any public offer by a third party to acquire Olivetti securities. The Shareholders Agreement shall remain in effect for a period of three years, and if neither party gives a notice of withdrawal in the manner prescribed in the Shareholders Agreement, it shall automatically be renewed for successive periods of three years. If Pirelli notifies Edizione Holding of its intention to withdraw from the Shareholders Agreement, then Edizione Holding will have the option to require Pirelli to purchase all its shares in the Purchaser at a price equal to 150% of the Transfer Price. Additional information about the Shareholders Agreement contained in Item 3 above is incorporated herein by reference. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS 1. Agreement, dated as of July 30, 2001, by and among Pirelli S.p.A., Edizione Holding S.p.A. and Bell S.A. (English translation) 2. Agreement, dated as of August 7, 2001, by and among Pirelli S.p.A. and Edizione Holding S.p.A. (English translation) 10 3. Power of Attorney appointing Ms. Anna Chiara Svelto as attorney-in-fact for Pirelli S.p.A. (English translation) 11 SIGNATURE After reasonable inquiry and to the best knowledge and belief of the undersigned, the undersigned certifies that the information set forth in this statement is true, complete and correct. Date: August 9, 2001 PIRELLI S.p.A. By: /s/Anna Chiara Svelto --------------------------------- Name: Anna Chiara Svelto Title: Attorney-in-fact 12 SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS A. PIRELLI S.P.A. The business address of each person listed below is c/o Pirelli S.p.A., Viale Sarca 222, 20126, Milan, Italy.
- -------------------------------- ----------------------- -------------------------------- ------------------------------------- POSITIONS WITH PRESENT PRINCIPAL OCCUPATION NAME CITIZENSHIP PIRELLI S.P.A. - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Marco Tronchetti Provera Italian Chairman and CEO Chairman and CEO, Pirelli S.p.A. and Chairman, Pirelli & C. - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Alberto Pirelli Italian Deputy Chairman Manager, Pirelli S.p.A. - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Carlo Buora Italian Managing Director General Manager, Finance and Administration, Pirelli S.p.A. - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Luigi Orlando Italian Director * - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Vincenzo Sozzani Italian Director * - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Alberto Falck Italian Director * - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Giampiero Pesenti Italian Director * - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Riccardo Perissich Italian Director Manager, Pirelli S.p.A. - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Giuseppe Gazzoni Frascara Italian Director * - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Carlo Alessandro Puri Negri Italian Director CEO, Pirelli Real Estate S.p.A. - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Frank Vischer Swiss Director * - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Giovanni Ferrario Italian Director General Manager, Tyres Sector, Pirelli S.p.A. - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Mario Greco Italian Director * - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Carlo Ciani Italian Director * - -------------------------------- ----------------------- -------------------------------- ------------------------------------- George F. Krayer Swiss Director * - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Eugenio Coppola Di Canzano Italian Director * - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Ennio Presutti Italian Director * - -------------------------------- ----------------------- -------------------------------- -------------------------------------
13
- -------------------------------- ----------------------- -------------------------------- ------------------------------------- POSITIONS WITH PRESENT PRINCIPAL OCCUPATION NAME CITIZENSHIP PIRELLI S.P.A. - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Carlo De Benedetti Italian Director * - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Oscar Cristianci Argentinian General Manager Cables and General Manager, Cables and Systems Systems - Energy - Energy, Pirelli S.p.A. - -------------------------------- ----------------------- -------------------------------- ------------------------------------- Kevin Riddett U.S.A. General Manager Cables and General Manager, Cables and Systems Systems - Telecom - Telecom, Pirelli S.p.A. - -------------------------------- ----------------------- -------------------------------- -------------------------------------
B. PIRELLI & C. LUX S.A. The business address of each person listed below is c/o Pirelli - Lux, 13, Bd. Du Prince Henry, 1724 Luxembourg.
- -------------------------- ------------------------- ------------------------------------- ------------------------------------- POSITIONS WITH PRESENT PRINCIPAL OCCUPATION NAME CITIZENSHIP PIRELLI & C. LUX S.A. - -------------------------- ------------------------- ------------------------------------- ------------------------------------- Claude Deschenaux Swiss Chairman * - -------------------------- ------------------------- ------------------------------------- ------------------------------------- Luciano Gobbi Italian Director General Manager, Pirelli & C. - -------------------------- ------------------------- ------------------------------------- ------------------------------------- Pierluigi Zanaboni Italian Director Manager, Pirelli S.p.A. - -------------------------- ------------------------- ------------------------------------- ------------------------------------- - -------------------------- ------------------------- ------------------------------------- ------------------------------------- - -------------------------- ------------------------- ------------------------------------- -------------------------------------
C. PIRELLI & C. A.P.A. The business address of each person listed below is c/o Pirelli & C., Via Negri 10, Milan, Italy.
- ------------------------------ ------------------------- ------------------------------------- ------------------------------------ POSITIONS WITH PRESENT PRINCIPAL OCCUPATION NAME CITIZENSHIP PIRELLI & C. A.P.A. - ------------------------------ ------------------------- ------------------------------------- ------------------------------------ Marco Tronchetti Provera Italian Chairman Chairman and CEO, Pirelli S.p.A. and Chairman, Pirelli & C. - ------------------------------ ------------------------- ------------------------------------- ------------------------------------ Alberto Pirelli Italian Deputy Chairman Manager, Pirelli S.p.A. - ------------------------------ ------------------------- ------------------------------------- ------------------------------------
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- ------------------------------ ------------------------- ------------------------------------- ------------------------------------ POSITIONS WITH PRESENT PRINCIPAL OCCUPATION NAME CITIZENSHIP PIRELLI & C. A.P.A. - ------------------------------ ------------------------- ------------------------------------- ------------------------------------ Luigi Orlando Italian Managing Partner * - ------------------------------ ------------------------- ------------------------------------- ------------------------------------ Carlo Alessandro Puri Negri Italian Managing Partner CEO, Pirelli Real Estate S.p.A. - ------------------------------ ------------------------- ------------------------------------- ------------------------------------ Carlo Buora Italian Managing Partner General Manager Finance and Administration, Pirelli S.p.A. - ------------------------------ ------------------------- ------------------------------------- ------------------------------------ Luciano Gobbi Italian General Manager General Manager, Pirelli & C. - ------------------------------ ------------------------- ------------------------------------- ------------------------------------
- -------------------------- *To be filed by amendment. 15 EXHIBIT INDEX Exhibit No. 1. Agreement, dated as of July 30, 2001, by and among Pirelli S.p.A., Edizione Holding S.p.A. and Bell S.A. (English translation) (A portion of this exhibit has been redacted pursuant to a confidential treatment request.) 2. Agreement, dated as of August 7, 2001, by and among Pirelli S.p.A. and Edizione Holding S.p.A. (English translation) 3. Power of Attorney appointing Ms. Anna Chiara Svelto as attorney-in-fact for Pirelli S.p.A. (English translation) 16 EX-99 3 ex-1.txt EXHIBIT 1 INFORMATION CONTAINED HEREIN, MARKED AS "[*****]", HAS BEEN INTENTIONALLY OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. Exhibit 1 Milan, July 30, 2001 Messrs BELL S.A. Luxembourg C/o Mr. Hansruedi Schenk Lugano CH Corso Elvezia no. 25 Dear Sirs, In reference to the discussions and agreements reached between your company and ours, we hereby inform you of our commitment to purchase - either directly or through a company to be controlled by us, to be designated by the Date of Execution, and of which we guarantee performance (hereinafter referred to as the "PURCHASER") - from yourselves and/or from a company or subjects designated by you for which/whom you guarantee performance (hereinafter referred to as the "SELLER") a participation in Olivetti S.p.A. (the "COMPANY"), composed as of today's date of 1,552,662,120 Olivetti ordinary shares (the "OLIVETTI SHARES") and 68,409,125 Olivetti S.p.A. 2001-2002 warrants (the "OLIVETTI WARRANTS" and, together with the Olivetti Shares the "PARTICIPATION") according to the terms and conditions stipulated herein below. 1. The unit price per Olivetti Share which we undertake irrevocably to pay you as at the Date of Execution (as defined herein above) is agreed upon as from now, including the wagering agreement, as 4.175 Euros (four point 175) with value date as of August 31, 2001, per share, with normal use and as such following detachment and payment of dividends for the 2000 period (the "UNITARY SHARE PRICE"). The unitary share price for each Olivetti Warrant which we undertake irrevocably to pay you as at the Date of Execution is agreed upon as from now, including the wagering agreement, as 1.0875 Euros (one point 0875) with value date as of August 31, 2001, per Olivetti Warrant, with normal use (the "UNIT WARRANT PRICE"). The total price for the purchase of the Participation is agreed upon, including the wagering agreement, as a total of 6,556,759,274 Euros, with value date as of August 31, 2001 (the "TOTAL PRICE"). By value date as of August 31, 2001 it is understood that any payment stipulated by this agreement, except the payment mentioned under point 16 below, will be reduced if payment should be made before August 31, 2001 and increased if it should be made after the said date by an amount equivalent to the simple interest calculated on the Total Price at the Euribor rate as of 1 month plus 75 b.p. ("Interest") based on the following formula: Interest = Total Price X (Euribor 1 month + 0.75%) X number of days early or late/360 2. The transfer of the Participation will take place as at the Date of Execution, pursuant to law and according to the terms of which you will be promptly informed, through recording in the accounts or deposits held by Purchaser with an authorized broker belonging to the Monte Tivoli centralized system, and including a transaction made through an authorized broker. Moreover, each party will, in as far as it is within its respective competence, sign and exchange all necessary documents to execute the transfer of the Participation in full and free of any sort of encumbrance, lien, third party rights, charges and anything else, (the "ENCUMBRANCES"). 3. The transfer of the Participation from the Seller to the Purchaser is subject on pain of suspension to obtaining the Authorizations (as defined under point 5 herein below) within the term of 120 (one hundred and twenty) days as of today's date, notwithstanding the Seller's power to extend said term by simple written communication. The Purchaser reserves the right to waive said condition of suspension or demand an authorization in derogation of the prohibition to execute a contraction of the said period, in accordance with the terms of art. 7, paragraph 4 of EEC regulation 4064/89, as subsequently amended. 4. Following attainment of the Authorizations, or even before that - if the Purchaser should waive the condition referred to under point 3 above - the Purchaser will inform the Seller of the said attainment or waiver and transfer of the Participation will therefore take place, with at least fifteen business days notice but no more than 30 business days after said attainment or waiver, in the place and at the time made known by the Purchaser or, failing this, by the Seller (the "DATE OF EXECUTION"). For the purposes of the release from any Encumbrances that the Participation Purchaser should undertake as from now to act so that the Total Price is paid entirely or in part - if Seller should so request - in favor of banks, so that same will perform any release from 2 Encumbrances for the purposes of transfer of the Participation to Purchaser according to the terms and conditions prescribed under point 2 above. 5. Authorizations pursuant to the terms of the present agreement will mean any authorization which is necessary or required by any applicable regulation, be it a European Community or a national one, in Italy or any foreign country it being understood that the authorizations and/or the permits and licenses and/or exemptions or missing prohibitions will likewise be understood to be granted and/or attained in the presence of orders by the competent authorities which subordinate the execution of the transaction to the fulfillment of prescriptions, measures and/or conditions of any sort (said authorizations, exemptions, permits and licenses or missing prohibitions - even when subject to prescriptions and conditions of any sort - are defined hereinafter as the "Authorizations"). It is likewise agreed that, if the Authorizations, exemption or permit should in turn be subject to any type of prescription or condition by the competent Authority, the Purchaser and the Guarantors (as defined under point 7) hereinafter agree to waive any exception arising from or related to said prescriptions or conditions to avoid or delay payment of the Total Price or invoke a reduction or change thereof. 6. Following the signing of the present document and receipt of the letter of acceptance by the Seller, the Purchaser will promptly prepare and present all communications and all the documents requested for the purposes of obtaining, in the shortest possible time, the Authorizations or analogous order of exemption. Seller will act so that the company and its subsidiaries give their own co-operation in the collection of information related thereto, such as is necessary for the purposes of fulfilling the authorization phase. 7. The Total Price will be paid by the Purchaser to the Seller as at the Date of Execution by transfer to the current account that the Seller will indicate to the Purchaser before the Date of Execution and/or under the terms and conditions expressed in point 3 above. 8. The Prompt and correct fulfillment of all the obligations mentioned in the present agreement is guaranteed in the amount of 80% by Pirelli S.p.A. and in the amount of 20% by Edizione Holding S.p.A. (the "GUARANTORS"), each of which, therefore, by signing the present, will be responsible in the amount indicated herein above for the obligations and consequences of non-fulfillment by the Purchaser. 9. The Seller undertakes to act so that as of the Date of Execution the members of the Board of Directors of the Company and of Telecom Italia S.p.A., as per the list enclosed hereto under 1, will have handed in their irrevocable resignation from the positions held with effect as of said date and each 3 INFORMATION BELOW, MARKED AS "[*****]", HAS BEEN INTENTIONALLY OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. resigning director will have made a written statement that same has no claims against the company in which s/he held the position, with the exception of any unpaid fees, decided upon before today's date. 10. The Seller has announced and the Purchaser has taken note that today Mr. Colaninno in his capacity as Managing Director and General Manager of the Company and Chairman and Managing Director of Telecom Italia S.p.A. has handed in his resignation from the positions with effect as from the time of the Board of Director's meeting, and the Board of Directors will take steps to replace him. The Seller has likewise announced and the Purchaser has taken note that the board of directors' meeting of the Company and of Telecom Italia S.p.A. have been convened which will replace Mr. Roberto Colaninno by co-option with Mr. Enrico Bondi to whom the same corporate positions as those previously held by Mr. Colaninno will be assigned and to whom moreover the same powers for the normal management of the Company and of Telecom Italia S.p.A. will be granted. During the next few days Mr. Colaninno will hand in his resignation as Director of Telecom Italia Mobile S.p.A. and Seat Pagine Gialle S.p.A. - without this amounting to an obligation for the Seller - and the Seller intends to proceed, without same constituting an obligation for Seller, with his replacement by Mr. Enrico Bondi to whom the same powers for the normal administration of the companies will be granted. 11. The Seller has announced and the Purchaser has taken note that, before the Date of Execution, every applicable regulation having been complied with, (i) the Company will approve the allocation to Mr. Colaninno of a gross amount of Lit. 30,000,000,000 which includes all amounts due (salary, severance pay, untaken holidays and vacations, and any other sums) relating to his employment relationship as General Manager of the Company and also of an extraordinary emolument for the activity carried on in his capacity as Managing Director and also acknowledging the fact that Mr. Colaninno has waived any further stock options to those accrued before or at the time of his resignation which therefore remain valid and exercisable pursuant to the provisions of article 7, heading b), of regulation 67/99; (ii) Telecom Italia S.p.A. will approve the allocation to the said Mr. Colaninno of an extraordinary emolument which is omni-comprehensive of all his rights including the stock options and other incentives accrued as of today's date for the activity carried on in his capacity as Chairman and Managing Director for a gross amount of Lit. 30,000,000,000 [*************************************************************** **************************************************************************]. In respect to this, the Purchaser declares that it has nothing to make exception to and undertakes to act so that in as far as it is in the power of same said 4 decisions will not be revoked and will be punctually carried out. Mr. Colaninno declares - without this constituting an obligation for the Seller - that he has nothing more to claim for any reason whatsoever from any companies in the Olivetti group. 12. The Seller declares that as of today's date the Olivetti group holds fewer than 218,500,000 ordinary Olivetti S.p.A. shares, it being understood that, if the said amount should as of the date of September 1, 2001 be higher than said number, save the case of the number in excess being determined by purchases made on the order or at the initiative of the Managing Director of the Company, the Olivetti Shares forming the object of the Purchaser's obligation pursuant to the terms of the present agreement will be understood to be reduced in number at a rate corresponding to said excess. 13. The Seller does not give and will not give any guarantee nor will it undertake any obligation to indemnify in relation to the economic and financial position of the Company and of the firms in which it has an interest. 14. The Purchaser undertakes not to propose, and to act so that its subsidiaries do not propose, to express a contrary vote and act so that its subsidiaries express a contrary vote, so that a resolution is not passed by the Company or by its listed subsidiaries for any action of responsibility or claim vis-a-vis the present directors and auditors, including those resigning today or a contrary vote be expressed in the meetings thereof in respect of any motions to pass resolutions for actions of responsibility vis-a-vis same. The said actions are understood to have been waived by the Purchaser, including pursuant to and for the purposes of art. 1381 of the civil code, vis-a-vis same. The commitments undertaken pursuant to the terms of the present point 14 must be understood as irrevocable, quite independently of the wishes shown by the beneficiaries to take advantage thereof or accept same. 15. As of today's date and until the Date of Execution the Seller undertakes to abstain from any transaction for the purchase and/or sale of shares and/or convertible obligations and/or warrants issued by the Company and by the listed companies controlled by same, with the exception of sale and purchase transactions which have already been concluded or are to be concluded between the Seller and its direct or indirect shareholders, or controlled companies and/or other transactions on instrumental securities or that are in keeping with the execution of the present agreement. 5 16. (i) The Seller states that Fingruppo Holding S.p.A. has stipulated a contract of co-sale relating to 54,000,000 Olivetti shares with Banca di Roma and agrees with the Purchaser that, if Banca di Roma should ask to sell said shares at the Unitary Share Price, the Seller will purchase or cause to be purchased said shares at the said price and will inform the Purchaser of having made the purchase within and no later than the following ninety days after the Date of Execution; (ii) the Seller grants the Purchaser the right to purchase the said shares at the Unitary Share Price within the following one hundred and eighty days after the date of receipt of the notice mentioned in the previous point (i); iii) if the Purchaser has not exercised the purchase option right pursuant to the terms of the foregoing point (ii) the Seller will have the right to sell the shares at the Unitary Share Price to the Purchaser - which irrevocably undertakes to purchase - within the thirty days following the expiry of the term mentioned under the foregoing point (ii). 17. All expenses, costs (including bank commissions) and charges including of a taxation nature in any way connected to the transfer of the Participation and the execution of the present agreement will be sustained by each party in as far as same are within their respective competence, with the exception of the contract note the cost of which will be borne in equal parts by each party. 18. No change, variation or amendment to the present agreement will be understood to be valid or binding unless made in writing by duly authorized representatives of the parties. 19. None of the parties is authorized to transfer any of its own rights, interests or obligations arising from the present agreement without the prior written consent of the other party. 20. All communications, approvals, requests, permits and other communications relating to the present agreement must be made in writing to the following addresses by registered letter air. (with advice of receipt), sent in advance by fax: If addressed to Bell: Bell S.A. Val Sainte Croix, 7 Luxembourg Fax no : 00352455858 Attn. the Chairman 6 Copy to: Hopa S.p.A. Corso Zanardelli, 32 25121 Brescia Fax no: 030 3773851 Attn. Mr. Emilio Gnutti If addressed to Pirelli S.p.A.: Pirelli S.p.A. Via Negri no. 10 Fax no: 02-85354099 If addressed to Edizione Holding S.p.A.: Edizione Holding S.p.A. Calmaggiore no. 23 Treviso Fax no: 0422-411118 21. The present agreement is governed by and will be interpreted in accordance with Italian law. 22. Any controversy which might arise from the present agreement, including any dispute relating to its interpretation, execution, cancellation, invalidity and/or ineffectualness will be under the exclusive jurisdiction of the Court of Milan. ********************** If your company agrees to all of the above, please inform us thereof by transmitting a copy of the present signed by yourselves as a sign of acceptance, thus undertaking the commitment to assign and transfer the Participation to our Company according to all the conditions and terms as indicated herein above. 7 Kind regards, (Pirelli S.p.A) [signature] (Edizione Holding S.p.A.) [signature] 8 EX-99 4 ex-2.txt EXHIBIT 2 Exhibit 2 AGREEMENT BETWEEN PARTNERS -------------------------- Between PIRELLI S.p.A. (joint-stock company, based in Milan, viale Sarca 222, having 1,042,775,333.08 Euros in stock capital, inscribed in the Milan Registry of Businesses, fiscal code and value-added tax number 0086890151, in the person of Chairman of the Board of Directors Dr. Marco Tronchetti Provera, who was granted the necessary powers through a resolution by the Board of Directors on July 28, 2001 (hereafter referred to as "Pirelli") - as one party - and EDIZIONE HOLDING S.P.A., based in Treviso, Calmaggiore 23, with 90,692,800,000 lire in stock capital, inscribed in the Treviso Registry of Businesses under number 13945, fiscal code and value-added tax number 00778430264, in the person of Managing Director Dr. Gianni Mion, who was granted the necessary powers through a resolution of the Board of Directors on July 27, 2001 (hereafter referred to as "Edizione") - as the other party - whereas (a) on the date of July 30, 2001, Pirelli and Edizione signed an offer to acquire, directly or through a subsidiary company to be named by the execution date as provided for therein, Olivetti Stock and Olivetti Warrants (as defined in paragraphs 1.01 and 1.23, respectively), from BELL S.A. (Spanish abbreviation for "company") (b) the offer by Pirelli and Edizione was accepted on the same date by BELL S.A. and the Contract (as defined in paragraph 1.04) was then drawn up; (c) the Parties (as defined in paragraph 1.15) intend to designate a common assignee company to proceed with the acquisition of Olivetti Stock and Olivetti Warrants; (d) to achieve the objectives indicated in the preceding premise, the Parties constituted the Company (as defined in paragraph 1.18) on the date of August 3, 2001, and Edizione shall have 20% (twenty percent) participation in it and Pirelli shall have 80% (eighty percent) participation; (e) in executing separate agreements between the Parties and BELL S.A. and G.P.P. INTERNATIONAL S.A., on the date of July 30, 2001, Pirelli acquired, acting also on behalf of Edizione, through a wholly subsidiary company, Kallithea S.p.A. (formerly S.r.l.) (limited-responsibility partnership), the Remaining Olivetti Stock (as defined in paragraph 1.16), which on the same date paid the Price (as defined in paragraph 1.16), using the liquidity made available to it by Pirelli through Financing (as defined in paragraph 1.08); (f) the Parties intend to ensure that the Remaining Olivetti Stock are transferred to the Company as soon as possible and in any case no later than August 30, 2001, against payment augmented by financial obligations related to the Financing, to be made on August 30, 2001, of the value as of that date; (g) Pirelli owns Pirelli Participations and Edizione owns Edizione Participations (as defined in paragraphs 1.13 and 1.14, respectively), which both Parties intend to transfer and cause to be transferred to the Company for the respective unitary prices of 2,1734 (check original) and 2,172 Euros (representing their respective average prices); (h) upon completion of the preceding transactions, especially once the conditions contained in the Contract are fulfilled, the Company shall be the owner of the Participations (as defined in paragraph 1.12); (i) Pirelli and Edizione intend to invoke the same conditions relative to the agreements made between them on the date of July 30, 2001, with respect to their reciprocal relationships as partners in the Company; all these premises being stated, and being an integral part of the agreement, the following is stipulated and agreed upon: 2 ARTICLE I DEFINITIONS In addition to the terms defined in other clauses of the Agreement (as defined in paragraph 1.06), for the purposes of the same, each of the terms listed below shall have the stated meaning: 1.01 "Olivetti Stock": 1,552,662,120 ordinary shares of Olivetti S.p.A., which is the subject of the Contract. 1.02 "Company Stock": 20% of the Company's capital stock. 1.03 "Conditions": conditions for suspension of the transfer of Olivetti Stock and Olivetti Warrants (as defined in paragraph 1.23) with regard to obtaining the Authorizations as provided for and required by the Contract. 1.04 "Contract": the offer dated July 30, 2001, made by Pirelli and Edizione to BELL S.A., accepted on the same date with regard to the contract of sale of Olivetti Stock and Olivetti Warrants. 1.05 "Strategic Subsidiaries": companies controlled by the Olivetti Group (as defined in paragraph 1.10 below), non quoted and operating in these sectors: infrastructures and services including the Internet, advertising collections, telephone annuities, television. 1.06 "Agreement": this agreement between Partners stipulated on this date between Pirelli and Edizione. 1.07 "Execution Date": the second Business Day (as defined in paragraph 1.09) preceding (stet) the execution date of the Contract. 1.08 "Financing": the interest-bearing financing granted by Pirelli to Kallithea S.p.A. on July 30, 2001, with interest tied to the Euribor rate at 0.25% per month on an annualized basis. 1.09 "Business Day": every calendar day, except for Saturdays, Sundays and days when banks are closed for normal business in the Milan market. 1.10 "Olivetti Group": the companies of Olivetti S.p.A., Telecom Italia S.p.A., Telecom Italia Mobile S.p.A. and Seat-Pagine Gialle S.p.A.. 3 1.11 "Olivetti": the company Olivetti S.p.A., based in Ivrea, Via Jervis, no. 77. 1.12 "Participation": Participation Pirelli, Participation Edizione, Olivetti Stock, Olivetti Warrants and the Remaining Olivetti Stock. 1.13 "Participation Edizione": the 134,322,250 ordinary Olivetti Stock belonging to Edizione. 1.14 "Participations Pirelli": the 130,980,000 ordinary Olivetti Stock owned by Pirelli. 1.15 "Party"/"Parties": Edizione and Pirelli, together or separately. 1.16 "Price": the sum of 4.175 (four point one seven five) Euros for each Olivetti share. 1.17 "Seat": the company Seat-Pagine Gialle S.p.A., based in Turin, Via A. Saffi no. 18. 1.18 "Company": the limited-responsibility company that the Parties constituted on August 3, 2001, and which will be turned into a stock company by August 30, 2001, for the acquisition of the Participations. 1.19 "Statute": the company statute that the Parties shall adopt by August 30, 2001, a copy of which is attached here under number 1.19. 1.20 "Telecom Italia": the company Telecom Italia S.p.A., based in Turin, Via Bertola no. 34. 1.21 "TIM": the company Telecom Italia Mobile S.p.A., based in Turin, Via Bertola no. 34. 1.22 "Remaining Olivetti Stock": 147,337,880 ordinary Olivetti Stock already acquired by Kallithea S.p.A. 1.23 "Olivetti Warrants": 68,409,125 Olivetti warrants for 2001-2002, which are the subject of the Contract. ARTICLE II CAPITALIZATION OF THE COMPANY The Parties hereby agree, by August 30, 2001 to adopt the text of the Corporate By-laws and to endow the Company with the means sufficient to enable 4 the Company to acquire additional Olivetti Stock, the Pirelli Participation and the Edizione Participation, in an amount not less than 5,200,000,000 Euros, participating in Edizione, in the amount of no less than 20% (twenty percent), and in Pirelli, in the amount of no less than 80% (eighty percent). ARTICLE III DESIGNATION OF THIRD PARTIES (a) The rights and obligations of the Parties deriving from this Agreement shall be understood to be assumed by the Parties unto themselves and/or by the person to be named by these parties by the Execution Date, in accordance and in observance with the terms established in Articles 1401 et sig. of the Civil Code and in accordance with the following conditions: (i) the designation may be made to only one person; (ii) the person named must be a company controlled by the nominating Party or must have 100% control over the nominating Party; (b) The nomination of the third party as established above and the respective acceptance thereof (when necessary) may occur through simple written statements, even arriving separately, as long as they are delivered to the other Party by the Execution Date, without any other restrictions in terms of the form (or any other nature), with a tacit understanding that the terms and stipulations of Article 1403 of the Civil Code are hereby waived; (c) each Party shall remain fully responsible for the person designated in accordance with the aforementioned stipulations; (d) to all effects of Article III herein, Edizione shall name its own 100% controlled company Edizione Finance International S.A.. 5 ARTICLE IV CORPORATE GOVERNANCE BODIES OF THE COMPANY 4.01 Composition of the Board of Directors. For the entire term of the present Agreement, the Parties hereby agree to do everything in their power, within the limits permitted by law so that: (i) The Board of Directors of the Companies is composed of 10 (ten) members; (ii) 2 (two) Board Members out of 10 (ten) are named by Edizione; (iii) in the event that a Executive Committee is name, 1 (one) of its members shall be elected from the 2 (two) board members named by Edizione; (iv) The Vice-President of the Board of Directors is named by Edizione from the 2 (two) board members named by Edizione; this person shall have the powers of vice-legal representative of the company. 4.02 Transfer of Duties. In the event that, for any reason whatsoever, including death, termination of the work agreement, or revocation on the part of the assembly of shareholders, one of the members of the board of directors named in accordance with the stipulations established herein should cease to perform the duties inherent in the position of board member, the Parties hereby agree to do everything in their power so that, within the limits established by law, the board member to replace the outgoing one should be named by the Assembly of shareholders of the company (and before that meeting during the preparatory meeting of the Board of Directors of company), in the person named by the Party who had named the person to be replaced. 4.03 The Board of Auditors. For the entire term of this Agreement, the Parties hereby agree to do everything in their power so that, in the limits established by law, one actual board member and one alternate board member shall be named by Edizione. 6 4.04 Confidential Material. Pirelli hereby agrees to do everything in its power, within the limits of law, so that no decision should be made by the Board of Directors of the Company without the favorable vote of at least one of the board members named by Edizione (if present) in application of section 4.01 on the following points of business: - an indication of the vote to be made by the Ordinary and Extraordinary Assemblies of Olivetti; - the purchase, sale, or arrangement in any manner of shares with a total value greater than 100,000,000 Euros per transaction; - decisions relating to the relations between the holdings of the Company and the holdings of third parties and the methods, terms, and conditions for sources of external financing; - proposals for decisions to be placed before the Extraordinary Assembly of shareholders of the Company. ARTICLE V THE ENTRANCE OF NEW PARTNERS 5.01 Pledges Made by the Parties. Waiving the stipulations of the Corporate By-laws, in particular in reference to the clauses relating to the Right of Pre-Emption and the Right of Co-sale, the Parties hereby agree that Pirelli, possibly in the period between the date in which the Company shall be constituted and the Execution Date, but even subsequent to that date, shall have the right to transfer shares of the Company to one or more parties up to the total of 20% (twenty percent) of the corporate capital of the Company, as longer as the buyers found by Pirelli for those purposes have received prior approval by Edizione, it remaining understood that this approval cannot be denied without valid reasons and motives if these companies are, in fact, financial partners, and in the event of entrance into the corporate capital of the Societa di Unicredito S.p.A. and/or Banca Intesa BCI S.p.A., which is under discussion, Edizione gives it assent from this moment forward. 7 5.02 Formalities. (a) For the purposes of the application of section 5.01 of this Agreement, Pirelli shall send Edizione a communication in the form established in section 14.02, including an indication of the number of shares reserved for sale to parties in accordance with section 5.01 above. (b) within a period of 5 (five) business days from the receipt of the aforementioned communication, Edizione must give its consent, where necessary in relation to the aforementioned matters, with a communication sent to Pirelli in the form established in section 14.02. It is hereby understood that in the event that Edizione fails to provide a communication within the aforementioned period, Pirelli may sell the shares in the Company to the third parties that it has found and communicated, as if Edizione had granted its consent, with the limit of 20% (twenty percent) of the corporate capital discussed in section 5.01 above remaining in effect in any case. ARTICLE VI OPA ON OLIVETTI SHARES For the entire term of this Agreement, the Parties hereby agree that, in the event that third parties should make a public offer of purchase with the intention of acquiring the Olivetti shares, in accordance with Legislative Decree 58/98, Edizione hereby agrees, from this time forward, when so requested by Pirelli through communication sent in the form established in section 14.02, and in accordance with the applicable stipulations of law, not to oppose, and to do everything so that the members of the Board of Directors of the Company do not oppose the acceptance of the public offer of purchase of the Company. 8 ARTICLE VII CORPORATE BODIES OF THE OLIVETTI GROUP 7.01 Composition of the Board of Directors of Olivetti. For the entire term of this Agreement, the Parties hereby agree to do everything in their power, within the limits established by Law, that in the Board of Directors of Olivetti, Telecom, TIM, and Seat (the "OLIVETTI COMPANIES"): (i) one fifth of the components of the Board of Directors of the Olivetti Companies (rounded off to the greater number up to two (2) board members), after the specific determination of the exact number of board members that shall compose the board, whose designation is not reserved by stipulations of law, by-laws, or regulations, to the market or other parties, be named by Edizione. (ii) the Vice-President of the Board of Directors of the Olivetti Companies, with the powers of vice-legal representative, be named from among the board members named by Edizione in accordance with the terms established above. (iii) in the event of the formation of an executive committee, 1 (one) of its members shall be elected from the board member or board members named by Edizione. 7.02 Composition of the Board of Directors of the Strategic Controlled Companies. For the entire term of this Agreement, the Parties hereby agree to do everything in their power, within the limits established by Law, that in the Board of Directors of the Strategic Controlled Companies: (i) one fifth of the components of the Board of Directors of the Strategic Controlled Companies, after the specific determination of the exact number of board members that shall compose the board, be named by Edizione. (ii) the Vice-President of the Board of Directors of the Strategic Controlled Companies, with the powers of vice-legal representative, be named from among the board 9 members named by Edizione in accordance with the terms established above. 7.03 For the entire term of this Agreement and notwithstanding the points established in sections 7.01 and 7.02 above, Edizione hereby agrees not to present opposition to the fact that the members of the Board of Directors of the Olivetti Companies and the Strategic Controlled Companies not named by Edizione, the Market, or Government Agencies, shall be named by Pirelli. 7.04 Termination of Duties. In the event that, for any reason whatsoever, including death, termination of the work agreement, or revocation on the part of the assembly of shareholders, one of the members of the board of directors named in accordance with the stipulations established herein should cease to perform the duties inherent in the position of board member, the Parties hereby agree to do everything in their power so that, within the limits established by law, the board member to replace the outgoing one should be named by the Assembly of shareholders of the company (and before that meeting during the preparatory meeting of the Board of Directors of company), in the person named by the Party who had named the person to be replaced. ARTICLE VIII DECISIONS MADE BY THE BOARD OF DIRECTORS OF THE OLIVETTI COMPANIES 8.01 Confidential Material. Waiving any stipulation to the contrary in the corporate by-laws, Pirelli hereby agrees to do everything in its power, within the limits of law, so that no decision should be made by the Board of Directors of the Company without the favorable vote of at least one of the board members named by Edizione (if present) in application of section 7.01 on the following points of business: (i) individual investments greater than 250 million Euros; 10 (ii) purchase, sale and deeds of disposition for any reason whatsoever of controlling and connecting shareholdings with a unit value of more than 250 million Euros; (iii) deeds of disposition for any reason whatsoever of firms or branches thereof individually greater than 250 million Euros; (iv) proposals to call the Extraordinary Meeting (v) Infragroup transactions between the Olivetti group and the Pirelli group for amounts individually greater than 50 million Euros; (vi) Transactions with related parties. ARTICLE IX REGULATIONS GOVERNING A DEADLOCK SITUATION 9.01 Identification of Deadlock Situations. For the purposes of Article IX herein, the following may be considered "DEADLOCK" situations: (i) A deadlock situation may occur as a result of a disagreement between the Parties such as to cause reasonable prospects of the inability to pass resolutions at the Extraordinary Assembly of the Company, or a decision of the Board of Directors of the Company in the matters of business discussed in section 4.04, or a decision of the Board of Directors of the Olivetti Companies cannot be validly made in accordance with the corporate by-laws of the company or the stipulations of section 4.04 or the situations discussed in section 8.01 of this Agreement; and (ii) The situation was the subject of a meeting between the parties in accordance with section 9.02 below. 9.02 Obligation of the parties to hold a meeting. The Parties hereby agree to hold a meeting in the event that a Deadlock Situation should arise, as defined in point (i) of section 9.01 above. 11 9.03 Procedure: (a) In order to fulfill the obligations assumed in accordance with section 9.02 above, the Parties hereby agree to meet, that is to consult with each other, through teleconference or video conference within and no later than the third (3rd) day preceding the date established for the meeting of the board of the Company, or the board of Olivetti, or, immediately, as soon as notification has been received, in the event of the urgent convocation of a meeting of the board of the Company, or the board of Olivetti, in accordance with the applicable legal stipulations. (b) During the meeting discussed in the above section, the Parties will do everything in their power to reach an agreement and/or to identify a common direction on the matters placed before them for examination, to these effects, and to act in good faith in these matters. (c) The unexcused absence of one of the Parties to the meeting or the abstention from the decisions reached during these meetings shall imply the acceptance of the decisions reached by the other Party and shall obligate the absent or abstaining Party to accept these decisions. 9.04 Expression of Will. (a) In the event that during the meetings discussed in sections 9.02 and 9.03 above, the Parties should reach an agreement in terms of the matters which form the subject of the aforementioned meeting, the Parties shall be obligated to express their will in applicable forums in accordance with the following stipulations: (i) by naming a common representative for participation in the extraordinary assembly of the Company and to cast a vote in this assembly, in a manner consistent with the points agreed upon; (ii) ensuring that their own representatives to the Board of Directors of the Company and to the Board of Directors of the Olivetti Companies participate in the board meeting and cast their vote during this meeting in a manner consistent with the points agreed upon. 12 (b) On the other hand, in the event that the Parties are not able to come to an agreement on the matters which form the subject of the aforementioned meeting, Edizione will be obligated to abstain from taking part in the meeting of the board and from casting its vote or having its vote cast and/or to abstain from expressing its wishes or taking a stand on the matters which form the subject of the aforementioned meeting, in any meeting or in any manner, notwithstanding the stipulations established in point (c) below. (c) In the event that the situation discussed in point (b) above should occur, Edizione shall have the right to send Pirelli a "NOTICE OF DEADLOCK SITUATION" by telegram or registered letters, in accordance with the terms of Section 14.02, within 15 (fifteen) days from the conclusion of the meeting discussed in section 9.03. (d) In the event that the Deadlock Situation discussed in section 9.01 should persist, and if the situation discussed in point (b) should occur, and if Pirelli does not receive the Notice of Deadlock Situation in the term established in point (c) above, Pirelli shall have the right to send Edizione, by telegram or registered letter, and in accordance with the terms established in section 14.02, a Notice of Deadlock Situation to be received by Edizione within 15 (fifteen) days from the conclusion of the term established in point (c) above. 9.05 Rights of the Parties. (a) In the event that one of the Parties should send the other Party a Notice of Deadlock Situation in the terms established in points (c) and (d) of section 9.04: (i) Edizione shall have the right (which shall be considered to be exercised with the receipt by Pirelli of the Notice of Deadlock Situation, in the terms established in point (c) of section 9.04 above) to sell to Pirelli, which will have the corresponding obligation of purchasing, all, and not part, of the Company shares at a price determined in accordance with the stipulations established in point (b) below; and (ii) Pirelli shall have the right (which shall be considered to be exercised with the receipt by Edizione of the Notice of Deadlock Situation, in the terms established in point (d) 13 of section 9.04 above) to purchase from Edizione, which will have the corresponding obligation of selling, all, and not part, of the Company shares at a price determined in accordance with the stipulations established in point (b) below. (b) For the purposes of point (a) above, the Parties hereby agree that the object of the decision shall be (x) the price of the Company Shares, taking into account the economic value thereof ("THE PRICE OF THE COMPANY SHARES") and (y) a value which is the expression of the pro-quota of the majority premium as if the Company Shares were the expression of Olivetti control ("PREMIUM"). The Price of the Company Shares and the Premium shall be determined through common agreement between Pirelli and Edizione within 10 business days from the date on which one of the Parties has received notification from the other party, in accordance with the terms established in point (a), or, if there is no agreement, by two investment banks of international standing, one of which chosen by each of the Parties. In the event of any disagreement between the two investment banks appointed as stated hereinabove, and if they are unable to fix the price and establish the premium within a period of 30 business days from the date on which they are named, the two banks shall name a third investment bank [indicated at the time that the two banks are named] of similar international standing which shall have the task of determining, with a binding effect on the Parties within the framework of the figures determined by the two banks, both the Price and the Premium . In case of disagreement of the two investment banks about the designation of the aforementioned third bank, the Chief of the Court of Milan shall name the bank. The Chief of the Court of Milan shall also be authorized [in the order and in the terms indicated above] to name the investment bank which one of the Parties has failed to name or to replace it in the event that it no longer performs this function. (c) The figures reached in accordance with point (b) above, and thus the Price of the Company shares and the Premium determined on this basis, shall be definitively binding for the Parties, in accordance with Articles 1349 and 14 1473 of the Civil Code, for the buying and selling transactions discussed in point (a) above. (d) The sales transaction shall be made within 30 (thirty) business days from the receipt of the communication to the Parties of the evaluation discussed in point (b) above, and the price included therein shall be understood as payable in cash at the time of the transfer of the Company Shares discussed in section 9.06 below. 9.06 Transfers. In the event that the Company Shares are to be sold in accordance with section 9.05 (a), the following stipulations shall be applicable: (i) the Company shares shall be understood as transferred for regular use on the date established in point (iii) below; (ii) the rights of ownership of the Shares sold shall be understood as transferred to the buyer on the date established in point (iii) below; (iii) the transfer of the Shares and the payment of the price for them shall take place at the offices of the Company, at 11:00 a.m. on the 5th (fifth) business day subsequent to the date on which the sale was concluded, in accordance with section 9.04(d) above, respecting, when applicable, any authorizations on the part of the competent authorities having jurisdiction over the Parties in relation to the sale; (iv) when the transfer and the payment established by point (iii) above have been made, the Company shares shall be free of restrictions or liens or third party rights of any nature. (v) the expenses, fees, or indirect taxes relating to the sale of the Company Shares shall be paid by the buyer; (vi) the taxes relating to capital gains made by the seller shall be paid by the seller; (vii) at the same time as the transfer of the Shares and the payment of the respective price, the seller shall make sure that the 15 board members (actual and alternate) named by the Seller shall retire from their position on the Boards of the Company and of Olivetti. ARTICLE X COLLATERAL PURCHASES 10.01 Obligations of the Parties. (a) for the entire term of this Agreement the Parties, unto themselves and through the companies controlled by them or the companies that control them, in accordance with the terms of Article 2359, section one of the Civil Code, may not purchase shares or bonds in Olivetti and/or Warrants which give them the right to purchase shares or bonds which may be converted into Olivetti shares, issued by Olivetti or Olivetti companies. (b) The Company may not purchase the shares and bonds and the financial instruments indicated in point (a) above in the amount exceeding the opa threshold of 30% (thirty percent), including the shares actually held either directly or indirectly. ARTICLE XI PENALTY FOR BREACH OF AGREEMENT In the event of the non-performance of one or more of the commitments assumed pursuant to the provisions set forth in this Agreement, the breaching Party, without prejudice to any other right of the other Party (including the right to compensation of the greater damage] shall be required to pay to the other Party as a penalty, at the latter's simple written request, an amount equal to 10% (ten per cent) of the principal amount invested by the non-breaching Party in the capital of the Company at that date, less any ordinary and/or special dividends that may have been received. 16 ARTICLE XII TERM 12.01 Effective date. The effective date of this Agreement is subject to the execution of the Contract and shall commence as of the purchase of the Olivetti shares and Olivetti warrants as specified therein. 12.02 Term. (a) This Agreement shall run for three years as of its effective date and shall be deemed to be tacitly renewed on each expiration date unless notice of withdrawal has been given by one of the Parties, without prejudice to the provisions of paragraph 12.03 below. (b) Other than in the cases specified by law, the Parties shall have the right to withdraw from this agreement on the expiration date: (i) as to Edizione, subject to a notice sent 6 (six) months in advance; (ii) as to Pirelli, subject to a notice sent 1 (one) month in advance. 12.03 Non-renewal. (a) In the event Pirelli gives Edizione by the deadline specified in point (ii) of paragraph 12.02 (b) above and in the form specified in paragraph 14.02, notice of withdrawal upon expiration of this Agreement, Edizione shall have the right to sell to Pirelli, which shall have the corresponding obligation to buy, all (but not part) of its shares of the Company, on terms and conditions determined, mutatis mutandis, in accordance with paragraph 9.05 (b) above, (and of the provisions set forth therein) giving notice to Pirelli within 30 (thirty) working days. In that event, however, the purchase shall be effected against payment of the price specified in art. 9.05 (plus an amount equal to 50% (fifty per cent) of the total of the Price of the Company Shares and the Premium. [b] Payment of the penalty shall be made immediately upon the simple written request of Edizione, to be sent to Pirelli at the end of 30 (thirty) days following communication given to the Parties of the determination made in application of the procedure specified in paragraph 9.05 (b) above. 17 ARTICLE XIII KEY EVENT a) Whenever, during the term of this Agreement, following one or several acts inter vivos carried out for any reason, for Edizione, Messrs. Luciano, Gilberto, Carlo and Giuliana Benetton, or their spouses or direct descendants, stop designating the majority of the board of directors of Edizione, and for Pirelli, Dr. Marco Tronchetti Provera stops, not by his own volition, assuring the strategic-operational management of the Pirelli Group, understood as Pirelli & C. Sapa and the companies directly and indirectly controlled, a "KEY EVENT" takes place. b) In the presence of the Key Event concerning one party, the other Party will have the right to transfer all (but not part) of its Company shares to the Party which incurred the Key Event, under terms and conditions determined mutatis mutandis pursuant to the previous paragraph 9.05 (b) (and the provisions mentioned therein) notifying such latter Party within 30 (thirty) Business Days from the day the other Party declared in writing that it became aware of the Key Event, or received written communication of such circumstance. However, in this case, the purchase and sale will take place against payment of the price referred to in article 9.05 (b) plus an amount equal to double the amount of the price of the Company Shares and Premium. ARTICLE XIV GENERAL PROVISIONS 14.01 Modifications. No modification of this Agreement shall be valid and binding until it is set forth in a written instrument signed by the Party against which the modification is invoked. 14.02 Communications and Notices. Any communication requested or permitted by 18 the provisions of this Agreement shall be given in writing and shall be deemed to be effectively and validly given upon receipt of same, if made by mail or telegram, or upon acknowledgment of receipt by means of a specific declaration (including by fax), if made by fax, provided it is addressed as follows: (i) if to Edizione, at the following address: Calmaggiore 23 Treviso Attenzione di: dott. Gianni Mion Telefax n. 0422-411118 (ii) if to Pirelli, at the following address: Viale Sarca 222 Milano Attenzione di: dott. Carlo Buora Telefax n. 02-64423454 or to another address that each of the Parties shall have the right to communicate to the other, subject to the procedures set forth in this paragraph 14.02, on the understanding that the Parties elect domicile for all purposes relative to this Agreement, including for any legal notices or notices involving the arbitration proceeding referred to in Article XV below, at the addresses indicated above or at any other addresses that may be communicated in the future. 14.03 Tolerance. Tolerance of any behavior in violation of the provisions contained in this Agreement does not constitute waiver of the rights arising from the breached provisions nor the right to demand precise compliance with all the terms and conditions specified herein. 14.04 Headings. The headings of the individual clauses have been provided only to facilitate reading and therefore are not to be taken into account for the purposes of interpreting this Agreement. 19 ARTICLE XV DISPUTES 15.01 Arbitration. Any dispute arising from this Agreement or from any executor, amending or supplementing instruments, shall be submitted to the unappealable ruling of an Arbitration Panel consisting of three arbitrators, who shall decide without any procedural formality other than respect for the principle of cross-examination, but shall apply substantial Italian law. The arbitration shall be customary in nature in accordance with the provisions of the code of civil procedure and shall take place in Milan. 15.02 Designation of the arbitrators. (a) The Party requesting the arbitration shall indicate, at least in general outline, the demands constituting the object of the arbitration. (b) The Party that initiates the arbitration procedure must at the same time and under pain of nullification, designate its own arbitrator. The Party called to arbitration shall have twenty (20) calendar days in which to designate its own arbitrator. The two arbitrators of the Parties shall jointly designate the third arbitrator who shall serve as chairman of the Arbitration Panel. Should the arbitrators designated as indicated above not come to an agreement on the designation of the third arbitrator within twenty (20) calendar days of the designation of the second arbitrator, said third arbitrator shall be designated by the Presiding Judge of the Court of Milan, who shall also be called upon if the Party called to arbitration fails to name its own arbitrator by the deadline indicated above. 15.03 Competent jurisdiction. Without prejudice to what is stipulated above, it is agreed that any legal proceeding related in any way to this Agreement shall be subject to the exclusive jurisdiction of the Courts of Milan. Milan/Treviso August 7, 2001 20 Attachments 1.19: Bylaws of the Company EDIZIONE HOLDING S.P.A. - ---------------- PIRELLI S.P.A. - ---------------- 21 EX-99 5 ex-3.txt EXHIBIT 3 Exhibit 3 TRADUZIONE DALL'ITALIANO ALL'INGLESE ------------------------------------ ITALIAN-ENGLISH TRANSLATION --------------------------- INDEX NO. 36787 FILE NO. 4465 POWER OF ATTORNEY AND REVOCATION -------------------------------- The Company PIRELLI SOCIETA' PER AZIONI, with its registered office in Milan, at Viale Sarca no. 222, a paid up share capital of Euro 1,034,429,598.28=, registered in the Companies' Register of Milan under no. 15901, inland revenue code no. 00886890151, represented by the General Manager for Financial and Administration Affairs Mr. Carlo Buora, born in Milan on the 26 May 1946, domiciled in Milan for the purposes of his office at Viale Sarca no. 222, by virtue of powers granted to him with Power of Attorney under Index no. 110157/16006 - of Mr. Riccardo Ferrario Notary in Milan - dated 18/2/1998, hereby grants power of attorney - with immediate effect - to Ms. Anna Chiara Svelto, born in Milan on the 29 October 1968, to exercise the following powers with individual and separate signature: 1. Represent the company in all its relations with state administrations and with any other Italian or foreign public administration; sign applications, claims and petitions; 2. Represent the company in court proceedings; begin and abandon proceedings including as a preventive precautionary measure and enforcement proceedings, therein included revocation and High Court proceedings, before any Italian or foreign jurisdictional authority and before the Constitutional Court, and in general any proceedings including those at supra-national level; fight back in same; appoint attorneys at law and barristers with all the necessary powers; elect domicile; 3. Represent the company in any bankruptcy proceedings, or proceedings for forced administrative winding up or receivership and promote declaration of same; insinuate debts therein; be present at meetings of creditors; accept and refuse proposals for composition and requests for admission to receivership and extraordinary administration proceedings; grant, within the limits of the said powers under 3, mandates to third parties for determinate special matters; 4. Represent the company in taxation and currency controls, inspections and official records of ascertainment and verification, and sign the relevant minutes and reports. NY2:\1070071\01\MX_701!.DOC\67793.0060 5. Undersign communications to the National Commission for Companies and the Stock Exchange, to the Bank of Italy, to the Chambers of Commerce, to Stock Exchanges and to other companies concerning fulfilments charged to the Company by laws and regulations. 6. Attend meetings of shareholders and bond holders of other companies or corporations, with powers of corporate representation, and take part in passing the relevant resolutions, including any of an extraordinary nature, about any matter, with the power to sub-delegate; 7. Take all the necessary steps to comply with the fulfilments required for the purposes of communications to be sent to the general file of shareholdings; 8. Perform any forwarding, clearance and collection transactions on goods, valuables, parcels, packets and letters, including registered and insured ones, at customs offices, the state railways "Azienda Autonoma delle Ferrovie dello Stato", haulage firms in general and the Administration of the Post and Telegraph offices; sign petitions, instances and claims, grant, within the limits of said power, mandates to third parties for determinate deeds or series of deeds. Whilst exercising the powers granted to her the foresaid Ms. Anna Chiara Svelto must sign under the heading "Pirelli Societa per Azioni" and must have her own name and surname affixed after her signature either by means of a rubber stamp or by typewriter. The company Pirelli Societa per Azioni, represented as set out hereinabove, substitutes the Power of Attorney granted to Mr. Enrico Silvestri by means of an authentic deed dated 22 April 1998, index no. 21270/1932, drawn up by Notary Ricci of Milan, which must therefore to all intents and purposes be considered to have been revoked. The present instrument shall be permanently kept in the files of the Notary who authenticates the signature thereon. Original signed by: Carlo Buora 2 -----END PRIVACY-ENHANCED MESSAGE-----